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Denver Real Estate 2012

We may not be in a citywide bull market, but there are plenty of reasons to feel pretty darn good about real estate in the Mile High City this year. This is especially true of Highlands, which has become a nationally recognized, trendsetting model for the possibilities of 21st-century new urbanism. Here’s how Highlands became the hottest part of town—and which local neighborhoods might be next.

On any given night, ask your friends, colleagues, or neighbors what they’re doing and where they’re going, and chances are the word “Highlands” will be part of the answer. Maybe they’ll be dining on pork steamed bao at the hotter-than-hot Linger, or grabbing a Negroni at the hipper-than-hip Williams & Graham. Maybe they’ll be canoodling over glasses of Burgundy at Z Cuisine, or downing a burger and a pint of Odell’s Levity Amber Ale at Highland Tap and Burger. Or maybe they’ll be queuing up for a cold treat and a warm night at Little Man Ice Cream.

Just as Manhattan’s formerly seedy Lower East Side and San Francisco’s Mission District have evolved from underserved no-man’s-lands into hip nightlife destinations (while maintaining just enough seediness to stay interesting), Highlands (which is composed of East Highland—aka LoHi—and West Highland) has over the past few years become the part of town to live in and be in.

What makes Highlands so hot? We polled some Denver real estate pros to determine the factors behind the boom, and in the coming pages we detail which neighborhoods have Highlands-type potential.

This is not to suggest that Highlands is problem free. The area’s educational options are still works in progress; Academia Ana Maria Sandoval Montessori magnet school and the bilingual Escuela de Guadalupe, for example, are much-lauded elementary learning centers, but North High School has a more modest track record. The education situation, though, will likely change “as families decide to stay in the city awhile and get more involved in the schools,” says Kentwood City Properties’ Liz Richards.

The burgeoning commercial activity means parking is threatening to become a big city–type concern. “Parking really needs to be thought out now,” Richards says. “There’s certainly a need, and if more parking can be provided”—via dedicated lots or garages—“people can make money on it, and it’ll be win-win.”

Then there’s overdevelopment. Besides the proposed multi-unit projects in Highlands Square, LoHi is witnessing all kinds of construction, much of it new buildings with dozens of rental units. Because LoHi has largely been zoned MX5, or mixed-use up to five stories, it’s ripe for new apartment buildings. “This area went from being transitional a few years ago to having a number of big-name developers coming in,” says Ryan Diggins, a partner with Gravitas Development Group, which has several Highlands projects. He says developers are using assemblages—purchases of multiple adjacent single-family lots—to get the necessary acreage for bigger rental projects. “They’re building primarily smaller, contemporary, more manageable, affordable, and energy-efficient units,” Diggins says. “LoHi is almost a blank canvas for this sort of thing.”

Richards, for one, says new rental properties in that area are actually overdue: “Until recently, there hasn’t been any new construction that’s a decent rental, so it’s fulfilling a huge need in the marketplace,” she says, adding that she doesn’t see the Highlands boom slowing any time soon. “Whether they’re buying or renting,” she says, “people want to go where it’s hot.”

Location

The rehabilitation of LoDo in many ways led to the Highlands renaissance. The nationwide new urbanism trend has renewed the appeal of city living, and once Denver erected the Millennium, Platte River, and Highland bridges, the seamless pedestrian and bicycle link between northwest Denver and downtown made it that much easier to walk or bike to work or to LoDo restaurants and recreation. Other neighborhoods, regardless of their proximity to downtown, have followed suit by improving paths for biking and walking or by adding light rail lines to speed commutes and get people out of cars.

Mixing commercialand residential

The once-booming, later-dormant Highlands commercial areas have been revitalized over the past decade. It’s more than just the retail and restaurant hub at Highlands Square; the area is also bubbling over with mini-commercial districts such as 32nd Avenue and Zuni Street, along Tejon Street, and on Tennyson Street between 38th and 45th avenues—stretches with a few eateries or boutiques that break up the residential enclaves and bring in visitors from other parts of town.

Walkability

Even if you aren’t heading downtown or out to eat, Highlands itself has plenty of attractions for the everyday pedestrian, such as Sloan’s Lake to the west and the Platte River trails to the east. There are plenty of parks—a boon to the growing number of young families in the area—and they’re spread out enough that the nonparents aren’t constantly fighting stroller traffic like in more congested parts of the city. And between historic Victorians, well-kept bungalows, Denver Squares, and vibrant new construction, a walk in Highlands is like a self-guided architectural tour.

Spreading the Wealth

One benefit of Highlands fever is that it’s surrounded by a number of once-modest neighborhoods that are becoming the indirect beneficiary of Highlands’ success. “Interest is moving north to Berkeley, east to Sunnyside, south to Jefferson Park, and west to Sloan’s Lake,” says Charles Roberts of Your Castle Real Estate. “You can almost see it on a block-by-block basis up to Pecos Street. The prices are still high in the epicenter, but they’ve moved into those other neighborhoods.”

Note:Although neighborhood boundaries are often in dispute, for our purposes West Highland is bordered by 38th and 29th avenues and Federal and Sheridan boulevards; East Highland sits between 38th and Speer Boulevard, and Federal and I-25. Together they form Highlands.